Which of the Following Statements Is False

question 44

Multiple Choice

Which of the following statements is false?

• A) A board is said to be classified when its monitoring duties have been compromised by connections or perceived loyalties to management.
• B) Even the most active independent directors spend only one or two days per month on firm business, and many independent directors sit on multiple boards, further dividing their attention.
• C) On a board composed of insider, gray, and independent directors, the role of the independent director is really that of a watchdog.
• D) Because independent directors' personal wealth is likely to be less sensitive to performance than that of insider and gray directors, they have less incentive to closely monitor the firm.

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Definitions:

Efficient Level

The point at which a system or process is operating at maximum potential without waste of resources.

MSC (Marginal Social Cost)

The complete expenditure for society to create an extra unit of a product or service, covering both personal costs and any additional external expenses.

MC (Marginal Cost)

The cost of producing an additional unit of a good or service.

P (Price)

The amount of money required to purchase a good or service, determined by the interaction of supply and demand in the market.